COMPANY PROFILE: BG International
(MEBG) - BG International came into being on May 1, 1999, with the integration of the British fas Group’s exploration and production, and the international downstream business units. BG International is involved in gas and oil exploration and production, gas transportation, distribution and power generation in some 19 countries. The integration of the two business units builds on the progress already made in delivering successful integrated projects in the United Kingdom, Asia, the Americas and the Middle East.
The following describes BG International’s interests in the Middle East.
BG International is an important participant in the development of the gas chain in Egypt, with investments both upstream and downstream. BG International has drilled 11 exploration and appraisal wells offshore in the Nile Delta since 1997, with a 100 percent success rate.
These major gas discoveries will be used to supply the growing local market, including BG International's Nile Valley Gas Company franchise in Upper Egypt, and in pursuit of export markets for uncommitted discoveries.
Upstream development projects:
Concession Partners :
- BG International (operator)—40 percent
- Shell—40 percent
- Edison International—20 percent
BG International and its partners, Shell and Edison International, signed a Gas Sales Agreement in October 1997, with the Egyptian General Petroleum Corporation (EGPC), to supply gas from the Rosetta ( near Alexandria) concession, offshore the Nile Delta.
EGPC will receive first gas in 2000, and production will rise to 275 million mscfd.
The gas will be delivered into the Egypt’s national grid system east of Alexandria.
The signing followed within seven months of the successful testing of the first exploration well, Rosetta-3, in April 1997, which flowed in excess of 60 million mscfd.
Two subsequent discovery wells each contain a total of more than 235 million of net gas pay. The first well drilled to appraise the initial discovery was successfully completed in November 1997.
Rashid Petroleum Company, a joint venture company involving BG International (20 percent), EGPC (50 percent), Shell (20 percent), Edison International (10 percent), has been formed to develop the three gas discoveries. Acting as a service company, it owns no assets, but will carry out all future development and exploration operations in the concession.
A second 3D seismic survey was acquired in early 1998 and identified substantial additional prospectivity of gas.
West Delta Deep Marine concession:
- BG International (operator)—50 percent
- Edison International—50 percent
The concession agreement was finalized in 1995 and 725 sq km of 3D seismic survey was shot in 1996, together with 900 sq km s of 2D seismic survey. In June 1998, two successful wells were completed in separate accumulations. The first well, Scarab-1, tested in excess of 30 million mscfd. Saffron-1, the second well, tested in excess of 90 million mscfd, one of the highest gas flow rates ever recorded in Egypt.
Both wells are in offshore Egypt, near Rosetta.
The well was drilled in 600 meters of water, a record for the Egyptian Mediterranean. Two appraisal wells, Scarab-2 and Saffron-2, were drilled in June/July 1998 and March 1999 respectively.
On 11 August 1999, a Gas Sales Agreement was signed for the development of the Scarab/Saffron field, which has reserves in excess of 4 trillion cf of high quality gas. First gas production is expected in January 2003 and, after a short build-up, the daily contract quantity will be 530 million mscfd over a period of at least 17 years.
This development will be the first to use deepwater technology in Egypt, in depths of up to 700 metters. Field development and operation, commencing with detailed engineering and design studies, will be undertaken by a joint venture company formed by EGPC (50 percent), BG International (25 percent) and Edison International (25 percent).
West Delta Deep Marine concession
In addition to the discovery of the Scarab/Saffron field, two additional discoveries have been made by the Simian-1 and P12/P13 wells. Each of these tested 44 million mscfd. Both domestic and export markets are being considered for these additional discoveries, with initiatives under way to evaluate the export of LNG.
North Sinai concession
- BG International (operator)—50 percent
- BP Amoco—50 percent
An exploration well, Thekah-1, drilled in the North Sinai concession in May/June 1997 tested in excess of 25 million mscfd. BG International is now evaluating different development schemes to monetise this discovered gas.
North Red Sea Area ( Block 1) concession
- BG International (operator)—68.75 percent
- Edison International—31.25 percent
A concession agreement for exploration in the North Red Sea Area Block 1 , that is offshore Egypt near Qena. The concession was finalised in June 1996. A 1,500 sq km
3D seismic survey is being shot in 1999 in order to assess high-grade areas in preparation for future activity.
Nile Valley Gas Company ( between Cairo to Qena)
- BG International—37.5 percent
- Edison International—37.5 percent
- Orascom—20 percent
- Middle East Gas Association—5 percent
BG International and its partners have signed a franchise agreement with EGPC for the exclusive right to develop the gas market in Upper Egypt. Involving a major extension to the Egyptian gas transmission and distribution system. BG International and its partners have formed a new company, the Nile Valley Gas Company, in which BG International will be the lead participant, to undertake the development of the gas market and infrastructure.
The 25 years franchise agreement provides for the project to be undertaken in a series of phases. The first phase has extended the gas transmission network from south of Kuriamat to Beni Suef, with first gas deliveries achieved in March 1999. This will provide gas to industrial consumers and over 20,000 domestic customers.
The second phase will extend the transmission network through construction of a 370 km pipeline to Asyut. A further two phases, 260 km from Asyut to Qena, and 270 km from Qena to Aswan, may be developed, subject to agreement with EGPC.
Egyptian Gas Master Plan (GMP)
At the end of 1997, BG International completed a three year consultancy project. The project dealt with the operation, maintenance and development of the gas system and associated SCADA telecommunication and instrumentation. BG International has now signed a consultancy agreement with Egyptian Natural Gas Company, to extend the GMP implementation services.
BG International was awarded exploration acreage on June 3,1999, involving seismic options, in Israeli Mediterranean waters. Middle East Energy, BG International's partner in a downstream bid for the Israel Gas Company franchise, joined BG International as a partner, taking 30 percent in September 1999.
In October 1999, BG International acquired a 50 percent interest in five Israeli offshore exploration licences in the Mediterranean Sea covering an area of 2,000 square km. The licences are Med Yavne (Block 239); Med Tel Aviv (Block 240); Med Hadera (Block 241); Med Ashdod (Block 242); and Med Hasharon (Block 243). All are between the city of Ashdod and an area south of Haifa.
The operato of these blocks was Isramco, but BG International was scheduled to take over the Med Yavne operation by the end of 1999
In November 1999, the Or-1 well, in the Med Yavne concession, was successfully tested. Following completion of this well, drilling will commence on the Or-South well.
BG International has a 25 percent share in an exploration and production sharing agreement (EPSA) offshore Qatar in the Arabian Gulf. This provides opportunities in oil and gas production and further exploration. Entitlement to gas is dependant upon successful market development.
Block 11 ( off shore Qatar near Ras Laffin)
This area was re-awarded under a new agreement in December 1997 and provides oil exploration rights in zones outside the North Field.
- BG International—25 percent.
- ARCO (operator)—27.5 percent.
- Gulfstream Resources Canada—27.5 percent.
- Wintershall—15 percent.
- Preussag Energie—5 percent
This contains the Al Rayyan Oil Development Area. Crude oil production began from a temporary production facility in November 1996 and is currently producing at the gross rate of some 17,000 bpd, OPEC cut backs having reduced the rate by 3,000 bpd.
Western part of Block 12
This area adjoins the Bahrain border and is not operational because of a territorial dispute border with Bahrain
British Gas Tunisia Limited (BGTL), a wholly owned subsidiary of BG International, is one of the largest foreign holders of Tunisian exploration and production acreage, with interests in two exploration permits totaling 3,496 sq km.
Gas from BGTL's Miskar field ( offshore near the Sfax ) supplies over 80 percent of Tunisia's total daily gas demand.
Miskar gas field
BGTL is operator of the field and holds a 100 percent interest in the Miskar production concession. Gas from the field is processed at the Hannibal plant, located 22 km south of Sfax.
BGTL has a sales contract with Société Tunisienne de l'Electricité et du Gaz (STEG), the Tunisian state electricity and gas company. STEG is contracted to purchase 168 million mscfd of gas for the first five years of production and 216 million mscfd thereafter. Sustained gas production began in May 1996.
BGTL is operator of the Amilcar exploration permit which is jointly held with the Tunisian State owned petroleum company, Entreprise Tunisienne d'Activitiés Pétrolières (ETAP).
BGTL drilled an appraisal well, Hasdrubal-3, in June 1997 which flowed at 21 mmscfd. A further appraisal well, Hasdrubal-4, drilled in June 1998, flowed 4.6 mmscfd and 1 800 bbls of oil from a single drill stem test. Development options for the field are currently being considered.
Awarded in March 1997, BGTL is operator of the Ulysse exploration permit which is jointly held with ETAP. There is an initial four year exploration period. A 3D seismic survey was acquired in 1997
© 2000 Mena Report (www.menareport.com)